The most politically costly reform in politics in decades is to end with the Senate preparing to wind up Labor's carbon tax and scrap the automatic move to a market-based trading scheme from next year.

Just before the House adjourned on Thursday, there were jubilant scenes on the floor of the House of Representatives as the Coalition passed the carbon tax repeal bills for the second time.

The final vote went through on the voices after which Environment Minister Greg Hunt was embraced and high-fived by colleagues.

He had earlier successfully moved an amendment to split the Clean Energy Finance Corporation abolition - which will not pass the Senate - from the package of bills.

Labor unsuccessfully moved an amendment to repeal the carbon tax and move straight to an emissions trading scheme.

Prime Minister Tony Abbott was not present to see the repeal go through as he was attending a function out of Canberra.

But on Friday, Mr Abbott said the government was taking nothing for granted on the carbon tax repeal as it had still to pass through the Senate.

''I'm optimistic that it will pass but we're not taking anything for granted . . . I'm just looking forward to the government and crossbench senators keeping their commitments to the Australian people,'' he told reporters in Sydney.

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The government's carbon tax repeal bill will be voted on by the newly configured Senate as early as July 7, but more likely a week later on the 15th - due to Senate procedural rules - after Mr Abbott secured the final crossbench support from Clive Palmer's Palmer United Party.

It will pass with the support of the Coalition, and most of the cross-bench independents and the PUP bloc which includes the Australian Motoring Enthusiasts Party's senator-elect, Ricky Muir.

Mr Abbott met Mr Palmer on Thursday morning and emerged happy that the minor party's four upper house votes would support the abolition of the fixed price, subject to just one condition - a guarantee that the package would contain legislated assurances of cheaper electricity for households.

The pair met in Mr Abbott's Parliament House office for 30 minutes - their first formal meeting in their current roles - to do the deal, jointly sounding the death knell of the policy issue that more than any other, Mr Abbott had built his 2013 election pitch on.

''This government will deliver on its commitment to abolish the carbon tax and I'm delighted that crossbench senators will deliver on their commitment to abolish this toxic tax once and for all,'' a triumphant Mr Abbott told Parliament later in the day.

''I look forward to working with him to ensure all the savings from the abolition of the carbon tax are passed on,'' he added.

The historic agreement came just 14 hours after Mr Palmer, flanked by one of the world's most prominent climate advocates, former US vice-president Al Gore, announced his party bloc would vote to scrap the carbon price.

However, in a setback to the government's overall plan, Mr Palmer also committed to retaining key pillars of the Labor-Greens climate change architecture in the form of the Climate Change Authority, the Clean Energy Finance Corporation, and the Renewable Energy Target.

The RET is the subject of an review which is due to report next month. There are concerns that mandating a 20 per cent quota for energy from renewable sources, had made electricity more costly and was harming the economy.

Many Liberals want the RET dumped but that option looks to be off the table given Mr Palmer's support. Mr Palmer also skewered the government's ''Direct Action'' plan declaring it was a waste of money and would therefore not receive PUP support.

That has left the friendless scheme in a legal limbo along with more than $1.1 billion in funds already appropriated. It means any future program run under that name may need to be scaled back and done through regulation rather than legislation.

Mr Hunt confirmed the government saw no obstacle to strengthening consumer protections following the dumping of the carbon tax, to ensure households received the full benefits of its removal.

The government has consistently said the tax has cost the average household $550 a year, meaning consumers should receive at least that discount once the tax is removed.

Mr Hunt said the new measures would add to the price monitoring role of the Australian Competition and Consumer Commission.

436 comments

Will the government now cancel the Carbon Tax Compensation scheme, as there is nothing to compensate. If the compensation remains, how does the government justify an unnecessary expenditure; or is this the $550 "saving" that Hunt boasts about?

Commenter

Gelert of Birrong

Location

Sydney

Date and time

June 27, 2014, 7:22AM

The $550 saving is just another lie from this dysfunctional government that has no policies and no vision for Australia other than to remove anything the previous government implemented.

The photo with the article sums up the LNP - celebrating this great achievement of nothing while sticking to their unfair and toxic budget.

Direct Action should join the PPL scheme as expensive political accessories past their due date.

Commenter

SteveH.

Location

Why does nature vie with its self?

Date and time

June 27, 2014, 8:43AM

Yes. Axe the compensation. And now that the ALP/Greens alliance all oppose Direct Action hopefully that will never get off the ground either. This means we don't have to spend a cent on climate action because the world hasn't warmed in almost 2 decades.

Commenter

Dave

Location

Melb

Date and time

June 27, 2014, 8:55AM

@Gelert you are wrong.The CO2 Tax Compensation package IS being cut - admittedly for pensioners only ($13/pf) on top of all the other make life difficult bits. The rest of the Compensation package to business and the taxpayer is however remaining at a cost to the budget meaning the CSIRO cuts and science cuts have to be made to compensate.The electricity organisations are arguing against adjusting their prices on the grounds Australians are already being over compensated for a tax that no longer exists

Commenter

Abel Adamski

Date and time

June 27, 2014, 9:01AM

@Dave, I know we're only part of the 3% that don't believe in climate change but all that means Dave is we're more intelligent than the other 97% of the people on this planet, you're not going to believe this Dave but most of those dumb 97% think the world is round as well!

Commenter

The Earth Is Flat

Location

Not To Close To The Edge

Date and time

June 27, 2014, 9:05AM

Keep your eye on EVERY bill when the CT is scrapped...i'll bet a billion dollars that ANY of our bills WONT drop by even one cent!!

Commenter

Steeden

Location

Ballina

Date and time

June 27, 2014, 9:08AM

If the Government axes the price on carbon, I can lay money on the probability that power and fuel costs will continue to rise regardless. With this in mind, it may be worth saving the compensation scheme, as there is no way this Government will save us from the greed of companies that continue to jack up prices.

Commenter

sickofblueties

Date and time

June 27, 2014, 9:13AM

'Direct Action' - Is that changing management culture by chucking money at Australian companies ? Most of them don't do their own R&D or even employ scientists, so how would giving them more money change anything ? The Gillard govt gave companies tax breaks to do R&D. Most of the actual R&D involved finding ways to get the tax breaks. Even when R&D IS done, it is under control of engineers and most of the work involves simply scoping the research project, a shiny-bum job.

Commenter

adam

Location

yarrawonga

Date and time

June 27, 2014, 9:17AM

@dave - gee Dave, glad you live on a far off planet! Heating for centuries but a couple decade slowing and you are popping the champagne!

27 Jun
As late as Wednesday morning, the conspirators behind one of most unlikely press conference in political history were still not completely convinced it would go ahead. It wasn't until Al Gore stepped off the plane that Don Henry, Ben Oquist, Andrew Crook and John Clements breathed a sigh of relief.

26 Jun
Clive Palmer says Tony Abbott is not an "evil person" and he believes a solution can be found around the Fairfax MP's announcement yesterday on the carbon tax and wider action on climate change.

27 Jun
The most politically costly reform in Australian politics in decades is to end with the Senate preparing to wind up Labor's carbon tax and scrap the automatic move to a market based trading scheme from next year.